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Correct Decisions

PorBen Schneider - 20 / 03 / 2014

On average a person says about 16,000 words per day. Imagine how many more go through our mind that we do not express. Many of them are evaluations or judgments mixed with emotions. Some are positive and pleasurable, and others negative, filled with fears. "Management" theory holds that, in the office, one should not express weaknesses, but rather project confidence and avoid all displays of negativity.

Still, each human mean has a torrent of feelings that includes criticism of oneself and others. To experience doubts and fears is natural. The mind has been designed precisely to anticipate and resolve problems, and to avoid painful falls. Susan David and Christina Congleton, consultants in behavioral strategy report on their research in Harvard Business Review, concluding that failures do not take place because executives in leadership positions express negative feelings, but rather for sticking to ideas and feelings based on their past experience. With this in mind, upper management executives are paid precisely to make difficult decisions, and judged on the quality of these decisions. They will clearly commit errors, but the important thing is for the balance to be positive.

It is impossible to eliminate the risk involved in making strategic decisions, but it is possible to improve the chances of getting it right, if one learns to categorize the type of decision to be made.

Two factors condition decisions: Control and Performance. The first is an evaluation of the extent to which one can influence the result of a decision to be made. We are either faced with conclusive decisions, or several decisions may be taken in sequential form as the process evolves. The second dimension, performance, has to do with how to assess the expected result. This can be measured in relative terms, for instance with respect to a competitor, or it is measured in absolute terms.

Phil Rosenzweig, professor at the IMD Business School of Switzerland, classifies decision types in four categories. Based on greater or lesser control of the result of the decision made, and whether the performance is absolute or relative. Therefore, routine decisions will fall in the area of low control but relative performance and, for these decisions, it will be enough to use common sense and avoid prejudices.

However, strategic decisions will fall in the area of high control and relative performance. This type of decision will require a combination of skills, such as being a good tactician, to anticipate rivals' moves, have an understanding of psychology to inspire the team, and even to have a poker player's ability to read the mind of the opponent and know when to "up the stakes".

The world of the mind and decisions play a transcendental role, especially in a turbulent environment where permanent instability takes executives to the limit when decision-making time comes. Mental strength, what one says and doesn't say, will be crucial in defining management success.